May 23, 2024
Bitcoin ETF

Harvest CEO Eyes Mainland China for Hong Kong Bitcoin ETF

The CEO of Harvest, the issuer of a spot Bitcoin exchange-traded fund (ETF) in Hong Kong, is exploring options to make the ETF accessible to mainland Chinese investors.

Han Tongli is considering avenues for mainland Chinese investors to purchase both Bitcoin and Ether ETFs offered by Harvest.

Utilizing ETF Connect Framework

As reported by the South China Morning Post on May 9, Harvest aims to offer its ETFs through Hong Kong’s ETF Connect framework.

Launched in 2022 and approved by both the China Securities Regulatory Commission and the Securities and Futures Commission, ETF Connect facilitates interaction and integration between Hong Kong and mainland China. It offers diverse asset allocation choices and promotes liquidity.

Han Tongli (center), CEO of Harvest, addresses Bitcoin Asia attendees on May 9, 2024. Source: SCMP

Potential Impact and Regulatory Hurdles

Harvest remains cautiously optimistic about the process, with Han mentioning that if everything progresses smoothly in the next two years, they may apply for their ETFs to be included in ETF Connect.

The inclusion of Bitcoin and Ether ETFs in the program could have a significant positive impact on cryptocurrency markets due to China’s substantial investor pool.

However, it remains uncertain whether the Chinese government would embrace this opportunity. This is because it has had a historically restrictive stance on cryptocurrencies like Bitcoin.

Market Dynamics and Expectations

Despite the anticipation surrounding the launch of Bitcoin and Ether ETFs in Hong Kong, industry analysts were skeptical about significant market movements. It cited the smaller size of the Hong Kong Bitcoin ETF market compared to the United States and mainland China.

To sum up, Hong Kong’s capacity to provide a Bitcoin ETF to mainland Chinese investors has been a topic of interest. Moreover, mainland Chinese subsidiaries hold significant assets in the mainland market, not the local one.

Image by wirestock on Freepik

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